Question

In a paragraph discuss the most important and relevant macro concept that you have learned in the course? Please don’t discuss “opportunity cost” or “supply and demand” or ‘elasticity” even though these concepts are extremely important.

Answer 1

Some basic concept in macro economics:

Inflation:

In general inflation means ''Too much of money chasing small of goods'.Inflation is a sustained rise in the price level,this means that,on average the price of product in an economy are going up over time,and the value of purchasing power of monetary falls.

Deflation:

Refers to sustain decrease in the price level, purchasing power increase and household can buy more products with their income.

Un employment:

It occurs when someone is willing and able to work but does not have a paid job.i.e.important indicator for understanding the status of labour market of a country.

Circular flow:

Flow of money, service and goods etc..the circulation in terms of income in the production process and distribution between the factor of production from household to firms.

Factor income:

It's refer to the income received by the factor of production (land,labour,capital,organization) for rendering factor service in the process of production.

Real flow:

One of the main type of circular flow,it means flow of factor service from household to firm.

Money flow:

It is the flow of factor payments from firm to household.