(v) Foreigners who are the employees of non-resident enterprises and who have come to the country for purposes of installing machinery or equipment purchased from their employers. Intermediate Goods each week) to work in the neighbouring country are the normal residents of their own countries. • Business expenses of the employees on tours and entertainment. For example, replacement of the tyres of a truck is an intermediate consumption, but not the replacement of its engine. Similarly, the Indian embassy in Washington is a part of economic territory of India. (i) Foreign visitors in the country for such purposes as recreation, holidays, medical treatment, study tours, conferences, sports events, business etc. Candidates who are pursuing in Class 12 are advised to revise the notes from this post. Intermediate Goods: As far as intermediate consumption of general government is concerned, it’s purchased goods ranges from ordinary writing paper, pencils and pens to sophisticated fighter aircrafts. 8. Chapter 1 Basic concepts 2. (b) It is static in nature, i.e., it do not change. (b) Expenditure on Military Equipment missiles, rockets, bombs, warships, submarines, military aircrafts, tanks, missile carriers and rocket-launchers etc. (ii) A person born outside India applies for citizenship and Indian Law allows him to become Indian Citizen. • Commodities used in basic scientific research. • Household (as the owners of factors of production) supplies factors of production (or factor services) to the producers. . Circular Flow Of Income In Two Sector Model: The following assumptions with regard to a simple economy with only two sector of economics activity are: The reference Class 12 MacroEconomics Chapter 1 Some Basic Conc R & U Very Short (Info & Concept) Solutions are in accordance with the latest CBSE exam pattern. . Intermediate goods: These are those, which are used for: Basic Concepts of Macroeconomics. The goods and services purchased include both durable goods and non-durable goods and services. • Commodities consumed. Structure of Macroeconomics implies study of different sectors of the economy. How many chapters are there total in Class 12 Macro Economics? . Clearly, those parts of the political frontiers (or boundaries) of a country where the government of that country does not enjoy the above “freedom” are not to be included in economic territory of that country. Every concept is covered in detail, so that you won’t miss out on anything.Â. Circular flow of income: It refers to flow of money income or the flow of goods and services across different sectors of the economy in a circular form. We offer one to one session as well. • Non-durable goods: Goods which can not be used again and again, i.e., they lose their identity in a single act of consumption are known as non-durable goods. (i) Current Transfers . 10. You will be able to access all the revision notes in PDF format in no time and these notes are available for free of cost. And amidst all these preparations, there will be someone or some committeeoverseeing or managing the entire event at a large scale or macro level. This sector mainly comprises the consumers and contributes to the role of consumption expenditure in GDP. It refers to flow of money, income or the flow of goods and services across different sectors of the economy in a circular form. Even foreigners can be the residents if they pass the above stated economic criterion. Circular Flow of Income and Methods of Calculating National Income ... CBSE Class 12-commerce Revision Notes. You and your friends may either volunteer for backstage help or participate in one or more events. (a) Value of all Non-durable Goods and Services such as petrol, electricity, lubricants, stationery, soaps, towels etc. We have made revision notes in such a way that they will benefit you during exam preparation. (a) According to the United Nations, economic territory is the geographical territory administered by a government within which persons, goods and capital circulate freely. The national output is the total amount of all goods and services produced in a country during a specific period. Economics Class 12 notes are simplified so that students find them easy to understand and can retain them easily without any problem. (b) In other words, final goods are those, which require no further processing and are available in an economy for consumption purpose or investment. They are motor cars, refrigerators, television sets, washing machines, air-conditioners, kitchen equipments, computers, communication equipments etc. Money flow (nominal flow): Money flow refers to the flow of factor income, as rent, interest, profit and wages from the producing sector to the household sector as monetary rewards for their factor services. A. They are treated as part of the economic territories of their respective countries. Consumption goods: Consumption goods are those goods which satisfy the wants of consumers directly. Students who are preparing for their Class 12 exams must go through NCERT Solutions for Class 12 Economics Chapter 1 Introduction to Macroeconomics and its Concepts. We at BYJU’S provide Sandeep Garg economics class 12 Solutions to give comprehensive insight about the subject to the students. (iii) Disposition Phase: . Students are under a lot of stress during the exam time, and when they don’t have Class 12 Macroeconomics notes, it adds to their stress. (b) It is dynamic in nature, i.e., it can be changed. (ii) A person is treated resident of a country on the basis of economic criterion. CBSE Class 12 Economics: Economics is the basic principle regarding money handling and usage of the same that plays an important role in development. Economics Class 12 notes are simplified by our in house experts so that students find them easy to understand and can memorise them easily without any problem. Final Goods A. Economic territory or Domestic Territory: 4. There are students who take some time to learn new stuff. (i) Capital goods are defined as all goods produced for use in future productive processes. Basic Concepts of Macroeconomics The economic wealth or well-being of a nation thus does not certainly rely upon the meagre ownership or possession of resources; the point is how these resources are utilised in causing a flow of manufacturing and how, as a result, income and wealth are caused from that procedure. (ii) The households spend their incomes on the goods and services produced by the producing sector. (i) Further processing; or 1. Pro Lite, Vedantu 1. Important Points about The solutions provided by Vedantu are strict as per NCERT guidelines. There are students who take some time to learn new stuff. . Some of your friends may also be involved in stage décor. As a result we can derive the following, in the case of our simple economy: 11. Students are already under a lot of stress during the exam time. These are medical care, transport and communications, education, domestic services rendered by hired servants, etc. We have expert teachers to make, These notes will help you to get high marks in the board examination of Class 12. including repair and maintenance of capital stock: Non-durable goods and services are those which have an expected life time of use of less than one year. Similarly, planes operated by Malaysian Airlines between India and Japan are a part of the domestic territory of Malaysia. Both these are mandatory in class 12 the economics. (b) It is a unilateral [one-sided] concept. There are two types of transfers: (i) Production Phase: We at Vedantu provide revision notes which are strictly designed as per the latest NCERT guidelines. Topic 1 : Basic Concepts of Economics 1. (i) Real flow of income implies the flow of factor services from the household sector to the producing sector and corresponding flow of goods and services from the producing sector to the household sector. . Consider a basic scenario of your school’s annual day celebrations. (a) These are the goods that are used for: However, the goods received for distribution to consumer households without renovation or alternation should not be included in intermediate consumption as these goods go into the final consumption of consumer households. Some Basic Concepts of Macroeconomics Some Basic Concepts of Macroeconomics. (ii) Household supply factor services to firms. CBSE Class 12 Macroeconomics chapter wise notes. (iv) Hence, Real flows of production and consumption of Firms and households = Money flows of income and expenditure of Firms and Households. 3. (iii) These two sectors are dependent on each other in the following ways: as residents (and not as nationals) of these countries. Albert Einstein 3. (c) According to the production boundary, if a good does not cross the imaginary line around the production unit and reaches to other firm within the production boundary, is known as intermediate good. 8. Normal Resident/Resident Government of India does not enjoy the above freedom in the foreign embassies located within India. But in national income accounting, the term domestic territory is used in a wider sense. That's why we at Vedantu ensure to provide you with the best Class 12 Economics revision notes. Repair and maintenance of capital stock mean expenditure incurred for maintaining fixed assets and keep them in good working order. 9. to help students understand the core idea of each topic. 1 Macroeconomics Macroeconomics (Greek makro = ‘big’) describes and explains economic processes that concern aggregates. In research and exploratory activities (like oil exploration in different parts of India by the Oil and Natural Gas Commission) or improving the technology of a particular production process. Students can ask their queries about, or any other topic that they find difficult to understand. (u) Categories of Consumption Goods: Macroeconomics is the part of economic theory that studies the economy as a whole, such as national income, aggregate employment, general price level, aggregate consumption, aggregate investment, etc. Macroeconomics is a branch of Economics that deals with the structure, behaviour, decision-making, and performance of an economy as a whole. (i) Personal Consumption (like bread purchased by consumer household), or (if) Investment Or Capital Formation (like building, machinery purchased by a firm) (They are supposed to stay for less than one year. (ii) Stocks of raw materials, semi-finished and finished goods lying with the producers at the end of an accounting year are also a part of capital goods. Our teachers are more than happy to help students. National Income and Related Aggregates class 12 Notes Economics in PDF are available for free download in myCBSEguide mobile app. You can easily download the PDF files of CBSE Revision Notes for Class 12 Economics from Vedantu and mobile app at absolutely free of cost. (c) It is not included in National Income as it does not contribute anything in the flow of goods and services. For example, scholarships, gifts, old age pension, etc. (ii) Let us consider a simple economy consisting only of 2 sectors: Pro Lite, CBSE Previous Year Question Paper for Class 10, CBSE Previous Year Question Paper for Class 12. . (c) There is no time dimension in stock variables. Final goods can be classified into two groups: Consumption Goods and Capital Goods. 2. 1. For example, Indian Embassy in Russia is a part of the domestic territory of India. Capital goods: Capital goods are defined as all goods produced for use in future (a) Real/Product/Physical Flow For example the U.S. embassy in India is a part of economic territory of the U.S.A. That’s why we have put extra efforts in. 2. Many students find the subject difficult because they don’t have access to the high quality CBSE Class 12 Macro Economics chapter wise notes. This includes a national, regional, or global economy. 3 • Embassies, consulates and military establishments of a country located abroad. 3. . 4. Then it is a final good, whereas, if a good is used for: (c) There is time dimension in flow variables. • Fishing vessels, oil and natural gas rigs and floating platforms operated by the residents of a country in the international waters where they have exclusive For example, purchases of building, machinery, etc. Vedantu not only chooses its teachers as per their experience but also takes into account their behaviour and nature towards students. (a) A Normal residenf, whether a person or an institution, is one whose centre of economic interest lies in the economic territory of the country in which he lives. In the given diagram, there are 3 production units. (b) Investment or capital formation (like building, machinery purchased by a firm) But, it is a Money flow, if we study it in terms of the market value of the goods produced. air-fields and submarines used to produce goods and are ready for sale in the market Stock Learning the important concepts is very important for every student to get better marks in examinations. . 9. It is also called the ‘Income Theory’ or ‘Employment Theory’. Its main instruments are aggregate demand and aggregate supply. Pro Lite, Vedantu Within this limit, wheat and flour are intermediate goods. The students need to learn micro as well as macroeconomics. However, the staffs of these bodies are treated as normal residents of the country in which the international body operates. Net Investment: If you follow the notes of Macroeconomics Class 12 Chapter 2 minutely, you will find that Net Investment = Gross Investment – Depreciation (Consumption of fixed capital). Our teachers are more than happy to help students. Its main instruments are aggregate demand and aggregate supply. (i) Total production of goods and services by firms = Total consumption of goods and services by Household Sector. CBSE Class 12-commerce Syllabus. Capital transfers: Capital transfers are defined as transfers in cash and in kind for the purpose of investment to recipient made out of the wealth or saving of a donor. Domestic Territory is geographical territory administered by a government within which persons, goods and capital circular freely. Many students find the subject difficult because they don’t have. (b) The above definition is based on the criterion “freedom of circulation of persons, goods and capital”. Some Basic Concepts of Macroeconomics Macro Economics: It is the branch of economics which studies economic issues or economic problems at the level of economy as a whole. The production boundary is the imaginary line around the production unit. Examples: Old Age Pension, Scholarship, Unemployment allowance. The entire NCERT textbook questions have been solved by best teachers for you. It is a Money Flow. productive processes. It is a branch of economics dealing with the performance, structure, behavior, and decision making of the entire economy. Examples of these transfers in kind are food, clothing, medicines, vegetable oils, butter, toys sent by the government of one country to the other in times of natural calamities or as a token of goodwill and friendship between two countries. Microeconomics and Macroeconomics are two most general fields in Economics. (ii) Factor Payments by Firms = Factor Incomes of Household Sector. Free PDF Download - Best collection of CBSE topper Notes, Important Questions, Sample papers and NCERT Solutions for CBSE Class 12 Economics Basic Concepts of Macroeconomics. . (v) Firms sell all that is produced to the households. (c) Value of goods received from foreign governments in form of gifts or as transfers. 4. Macroeconomics is the part of economic theory that studies the economy as a whole, such as national income, aggregate employment, general price level, aggregate consumption, aggregate investment, etc. However, it’s not necessary that all purchases by one production unit from other production units are intermediate purchases. . 7. (i) One example is embassies. (b) Money Flow We have covered everything in detail; you won’t miss anything.Â. . These are foodgrains, milk and milk products, edible oils, beverages, vegetables, tobacco and other food articles. Macroeconomics It studies economic problems at the level of an economy as a whole. • It deals with the production of goods and services by the producer sector. (b) Production Boundary We Are Explaining Concepts in easy way and using some images which help to understand the topic , we also provide Video Lecture about that topic in the form of QR Code . For example, international body like World Health Organisation located in India is not normal resident of India but Americans working in its office for more than a year will be treated as normal residents of India. The Class 12 MacroEconomics Chapter 1 Some Basic Conc R & U Very Short (Info & Concept) Solutions of Xam Idea holds high regard among students of CBSE Class 12. (iii) In layman terms, the domestic territory of a nation is understood to be the territory lying within the political frontiers (or boundaries) of a country. CBSE Class-12 Revision Notes and Key Points CBSE quick revision note for class-12 Physics, Chemistry, Math, Biology and other subject are very helpful to revise the whole syllabus during exam days. (i) Current transfers (ii) Capital transfers For example, all the durable goods like cars, trucks, refrigerators, buildings, aircrafts, An aggregate is a multitude of economic subjects that share some common features. We have expert teachers to make Class 12 Economics notes. It includes the study of topics/ subtopics like Employment, The growth rate of National output, GDP, Inflation, General Price level and stability etc. • Semi-durable goods: These goods have an expected life time of use of one year or slightly more. rights of operation. Transfer income: Income received without rendering any productive services is known as Transfer Income. CBSE Class 12 Economics full study material and chapter notes. (d) Rest of the world sector engaged in exports and imports. (ii) Market for factors of production, factor market. Such an economy described above has two types of markets. All our teachers are patient enough to teach you every concept in a friendly manner, no matter how much time you take to understand the topic.Â. (a) These are the goods that are used for: Macroeconomics notes Class 12 are made in such a way that it is easier for students of all calibre to understand them easily. Some Basic Concepts of Macroeconomics; Circular Flow of Income and Methods of Calculating National Income. Economics is basically a part of Social Science that includes various topics such as the production, distribution, and consumption of goods and services by a country. This interdependence can be explained with the help of the diagram given here. Moreover, by learning NCERT class 12 Macroeconomics, you can assess government welfare and employment. Students can ask their doubts that they face in Macroeconomics Class 12 notes anytime. (i) The resident lives or is located within the economic territory for more than one year and whose function is to release weapons. It is also called the ‘Income Theory’ or ‘Employment Theory’. 1. (i) Further processing (like sugar used for making sweets); or For example, Fishing boats operated by Indian fishermen in international waters of Indian Ocean will be considered a part of domestic territory of India. 5. 2. • If we study it in term of the quantity of goods and services produced, it is a Real Flow. 10. Class 12 Economics Notes. Macroeconomics is a branch of Economics that deals with the structure, behaviour, decision-making, and performance of an economy as a whole. They cram its concepts while in class 11th but in class 12th, cramming is not valid as the syllabus is wide as well as complex. Stock: As per notes of Macroeconomics Class 12 Chapter 2, the quantity of any economic variable which is gauged at a specific point of time is termed as a stock. Chapter wise Revision Notes for Class 12 Macro Economics. Macroeconomics Class 12 PDF is a great way of saving time and effort. For example, Distance, Amount of Money, Money Supply, Water in Tank, etc. NCERT Solutions for Class 6, 7, 8, 9, 10, 11 and 12, CBSE NotesCBSE Notes Macro EconomicsNCERT Solutions Macro Economics. It is an economics concept based on the basic economics activities performed by a person. Once you complete the entire syllabus, revision is extremely important before exams. is a great way of saving time and effort. Point to Remember for Final Goods and Intermediate Goods (iii) It is not necessary that a resident must also be the national of that country. We have covered everything in detail; you won’t miss anything.Â, Students are under a lot of stress during the exam time, and when they don’t have, are made in such a way that it is easier for students of all calibre to understand them easily. (a) Income earned by factor of production by rendering their productive services in the production process is known as Factor Income. 11. Where can I find Chapterwise Class 12 Macro Economics revision notes? For example, bread used by a consumer household is a final goods, but the same used by a bakery for making a sandwich is a intermediate goods. (iii) Officials, diplomats and members of the armed forces of a foreign country. We offer one to one session as well. The best app for CBSE students now provides accounting for partnership firm’s fundamentals class 12 Notes latest chapter wise notes for quick preparation of CBSE board exams and school based annual examinations. should be studied carefully to score good marks in the board examination of Class 12. This is the 2nd chapter of Macroeconomics Class 12th . Factor income and transfer income.2. Vedantu’s Macro Economics revision notes Class 12 are made in such a way that it is easier for students of all ability to understand them easily. Chapter-2 : Basic Conceptes of Macroeconomics. (c) The government sector engaged in activities like taxation and subsidies These phases are illustrated in the figure given here. Introduction to Economics; Chapter 2 – National Income Accounting. • Disposition means expenditure made. (iv) Households spend their entire income on consumption. Example: Nepal. These notes will help you to get high marks in the board examination of Class 12. 6. (i) Money flow refers to the flow of factor income, as rent, interest, profit and wages from the producing sector to the household sector as monetary rewards for their factor services as shown in the flowchart. There are two types of Circular flow: (iv) These goods require repair or replacement over time as their value depreciate over a period of time. • Durable goods: These goods have an expected life time of several years and of relatively high value. You can also avail the same facility from the mobile app as per your convenience. Class-12CBSE Board - Basic Concepts of Macroeconomics - LearnNext offers animated video lessons with neatly explained examples, Study Material, FREE NCERT Solutions, Exercises and Tests. Learning the important concepts is very important for every student to get better marks in examinations. For example, Indian Ships moving between china and India . . (a) Real flow Factor Income Accordingly, money flows back to the producing sector as household expenditure as shown in the flowchart. Thus, the basis of classification between these two goods is not the commodity itself, but the use made of it. Its main instruments are aggregate demand and aggregate supply. (ii) The resident carries out the basic economic activities of earnings, spending and accumulation from that location Examples: Rent, interest, wages and profit. (a) Any economic variable which is calculated at a particular point of time is known as stock. 2. We have made notes in such a way that they will greatly benefit you during exam time. (b) Capital Goods: By contrast, microeconomics treats economic processes that concern individuals. . Experienced and friendly teachers to help you with notes of Macroeconomics Class 12, All teachers at Vedantu have extensive experience of teaching in schools where NCERT curriculum is being taught. This includes the expenditure on new parts of the fixed assets. (b) It means, Indian citizenship can arise in two ways: It is concerned with the determination of aggregate output and general price level in which are not concerned with an individual rather the economy as a whole. (i) When a person is born in India, he acquires automatic citizenship of India. Household expenditure as shown in the board examination of Class 12 notes.! Are a part of economic territory of India derived from Greek Prefix “ macr o! Are covered:1 day celebrations chapters under Class 12 notes Macro to help students understand core! 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