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The above definition points out that, economic growth can be seen when there is:
growth, failing which, growth potential may not be realized to its fullest
extent.
The table below brings out a clear-cut distinction between the two concepts economic growth and
economic development.
steady change in the long run which discontinuous and spontaneous change
comes about by a gradual increase in the in the stationary state which forever
rate of savings and population alters and displaces the equilibrium state
previously existing
Economic growth means more output Economic development means both
greater efficiency i.e. more output per composition of output and in the
trade
Growth is possible without Development without growth is not
but may not develop because of poverty, rapidly, an economy cannot develop in
may be absent
the countrys total output of final goods and services in real terms. This
is to be measured over a long period to confirm that the growth is
sustained.
8. Welfare
a. Economic welfare can be measured in terms of flow of material goods
quality of life.
10.Other indicators
a. Capital formation
b. Changing structure or imports and exports
c. Use of energy
The average income of the people of a country in a particular year is called per
capita income for that year. The concept also refers to the measurement of income
Illustration:-
Per capita income (PCI) for 2000 = National income for 2000 / population in 2000
Real per capita income for 2000 = Real national income for 2000 / population in
2000
Per capita consumption (PCC):
There is also a tendency to measure economic development from the point of view
What is Economics?
In your daily life you must have experienced that as a human being you hold many
desires and requirements but the means to satisfy them are limited. For example,
let us assume that you are a student of an undergraduate programme and as you are
still studying, you don't have any regular source of income except for the monthly
pocket money of Rs. 750 which your parents are giving to you every month. This
pocket money is the only monetary source for you to take care of your monthly
expenses. Thus, we can say that you have limited monetary resource of Rs. 750 per
month to satisfy your various desires and requirements. Let us further assume that
You want to see the latest movie which has been declared a box office hit
You want to buy a new car similar to the one which your friend owns and
uses
You want to purchase mobile phone cum tablet which has been recently
You want to eat out with your friends in good restaurant located near your
college
You need to buy certain course books as your semester end examinations are
near
You have to spend on taking print out of the six class assignments which are
In nutshell, your desires and requirements are many and your means are limited
(Rs. 750 that you get every month as pocket money). In such a case, you will have
to prioritize your desires and requirements on the basis of their importance and the
gains associated with them. In other words, you will be able to satisfy only some of
your desires and requirements and not all as you have limited means or resources.
Thus in above example you might be position to satisfy only following few desires
and requirements:
Paying for taking print out of the six class assignments due for submission
And either seeing the movie released recently or eating out with your
friends.
This action of yours through which you allocated your limited resource (pocket
money of Rs. 750 per month) in order to satisfy your various desires and
requirements while ensuring maximization of your gain or return is the crux of the
subject Economics.
individual is encountered with unlimited desires but holds limited means to satisfy
them. Economics studies that how individuals (i.e.; an Individual human being or
an individual firm or Industry etc) optimize their resources to maximize their gains.
definitions of 'Economics':
between given ends and scarce means which have alternative uses"
1. How an individual uses his limited resources to maximize his well being
2. How companies use their limited resources to maximize their business gains
and profit
3. How an Industry uses the limited resources in order to maximize gains of the
firms which are part of the Industry as well as the Industry as a whole
4. How society at large uses the limited resources at its disposal in order to
individuals in society.
Various aspects of economic theory study and analyze the following: Production and factors of
production (Land , Labor, Capital and Organization), Cost, Factors impacting Demand and Supply,
Demand and Supply analysis, Pricing under various market situations, Factor Pricing, Welfare analysis,
Consumption, Money, National Income, Investment, Distribution, Problem of economic growth and
development etc. }}
economy and it studies the decision making process and economic problems of
individuals ( household, firm, industry etc) in an economy with respect to that how
they use scarce means or resources at their disposal for satisfying their unlimited
ends. On the other hand Macroeconomics looks at a larger picture and is study of
economy as a whole.
to how they use/divide their given scarce means among the possible alternative
does not study the economy as a whole and instead studies the individuals and their
individual (human being, household, firm, industry etc) behavior with respect to
economic issues like business cycles, inflation, deflation, stagflation, issues related
whole.
issues and problems affecting economy at a broader level. These issues can
impact the decision making of the individual firms, industry, households etc.