Macroeconomic Fundamentals: Indicators, Growth, and Markets
How the Economy is Measured
What is GDP and its types? Why distinguish them?
Gross Domestic Product (GDP) is the total market value of all final goods and services produced within a country over a specific period, typically one year. It serves as a broad indicator of economic activity and performance.
There are two primary forms of GDP:
- Nominal GDP: Measures economic output using current prices in the year the goods and services are produced. It can be misleading when comparing over time because it
Optimizing Public and Private Service Delivery
Balancing Public and Private Service Provision
To determine the right balance, consider public and private provision as inputs used to produce a desired output or result. For instance, teachers, classrooms, books, and private tutors are all inputs into producing educational quality. What truly matters to people is the final result (e.g., high educational quality), not the specific method used to achieve it.
Key Factors in Service Provision
Several critical factors influence the choice between public
Read MoreUnderstanding Key Economic Concepts: Poverty, Unemployment, and Growth
Poverty
Poverty is a complex and multifaceted issue affecting individuals, communities, and societies worldwide. Key aspects include:
Definitions
1. Absolute Poverty: Living without basic necessities like food, water, shelter, and clothing.
2. Relative Poverty: Living below a certain standard of living, often defined as a percentage of the median income.
Causes
1. Economic Factors: Unemployment, low wages, and lack of access to education and job opportunities.
2. Social Factors: Discrimination, inequality,
Read MoreEconomic Collapse: The Great Depression and Its Worldwide Effects
The Great Depression’s Global Origins
Existing connections in the international economy, especially the dependence of the United States on the European economy, caused the Great Depression to spread throughout the world. The falling prices in America affected other industries globally that had higher prices than American goods. These industries, unable to compete, saw their exports drastically reduced. At the same time, the decline in U.S. demand (and hence of its imports) halted exports in many
Read MoreThe Great Depression of 1929: Causes, Impact, and Recovery Strategies
The 1929 Economic Crisis
Origins of the Crisis
The Crisis of 1929 was a universal economic downturn, primarily characterized by a crisis of overproduction. How did this situation develop?
During the First World War, countries not participating in the conflict focused on producing and selling goods to warring nations, thereby creating a fictitious market. They sold their products, increasing their profits, even if payments were sometimes delayed. They even lent money to warring countries to purchase
Read MoreUnderstanding Key Financial Instruments and Market Dynamics
Commercial Bill Market Operations
Commercial Bill Market in India: Operation Explained
The Commercial Bill Market in India is a sub-market of the money market, where short-term negotiable instruments called commercial bills (or bills of exchange) are traded. These are used primarily to finance working capital needs of businesses, especially for trade transactions.
How Commercial Bills Operate
Issuance of the Bill (Trade Transaction)
A seller (drawer) sells goods on credit to a buyer (drawee). To ensure