Author: admin
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Significance of Money
Money is derived from the Latin word Moneta, which is another name for the Goddess Juno of Rome. The first mint was established in Rome in the temple of the Goddess Juno or Moneta. Money cannot be explained only in terms of the matter it embodies, such as metal or paper. It should be explained by the…
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Evolution and Definitions of Money
Money is anything that is generally accepted as a mode for payment of goods & services and repayment of loans & debts such as taxes, etc., in a particular nation or country. Money was invented to facilitate trade as the barter system, but it can not express the value and prices of goods & services. The…
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What is barter system and double coincidence of wants?
A barter system is the oldest form of commerce. Earlier, all the trade practices were carried out according to the barter system of exchange. People used to exchange goods with each other to satisfy their wants. A barter system refers to the exchange of goods & services with two or more parties without the use of money.…
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Treatment of Different Items in Domestic Income
Domestic Income of an economy consists of income earned, i.e., only factor income and not transfer income by all the production units whether they are residents or non-residents, located within the domestic territory of the country, as the reward of their productive services or contribution to the flow of goods and services in the current…
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Treatment of Different Items in National Income
National Income is the aggregate value of all goods and services produced by firms in a given financial year. It can be stated that when the aggregate revenue generated by the firms is paid out to factors of production, it equals aggregate income or National Income. The National Income can be calculated by using either…
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Income Method of calculating National Income
National Income refers to the value of goods & services produced by a nation during a particular financial year. Therefore, it is the net result of all the economic activities that take place during a financial year and is valued in monetary terms. It includes payments made to various resources either in form of rents, wages,…
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Expenditure Method of calculating National Income
National Income is the aggregate value of all goods and services produced by firms in a given financial year. It can be stated that when the aggregate revenue generated by the firms is paid out to factors of production, it equals aggregate income or National Income. The National Income can be calculated by using either…
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Product or Value Added Method of calculating National Income
National income refers to the value of goods & services produced by a nation during a particular financial year. Therefore, it is the net result of all the economic activities that take place during a financial year and is valued in monetary terms. It includes payments made to various resources either in form of rents, wages,…
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Circular Flow of Income and Methods of Calculating National Income
Macroeconomics tries to study the central questions of economies. Amongst these questions, the main question is how economies create wealth. In an economy, all factors of production (FoP) undergo a production flow/cycle, in the process of which, it generates wealth in the form of making payments to the factor of production, known as factor payments. Thus, the…
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Difference between Stock and Flow
Every economy has a given set of natural resources, but it goes through the flow of production that adds certain value addition in these types of resources and returns produced goods and services, which differentiates a rich economy from that of a poor. An economy produces a lot of commodities and services; therefore, to understand…