1. Aggregate demand - Aggregate supply approach
2. Saving - Investment approach

1. The social accounting framework is useful for economists as well as policy makers, because it represents the major economic flows and statistical relationships among various sectors of the economic system.
2. It becomes possible to forecast the trends of economy more accurately

(i) Medium of exchange
(ii) Store of value
(iii) Measure of value
(iv) Standard of deferred payment

The movements of business cycles are,
(i) Boom
(ii) Recession
(iii) Depression and
(iv) Recovery

(i) Regression means going back and it is a mathematical measure showing the average relationship between two variables.
(ii) It indicates the cause and effect relationship between the variables and establishes functional relationship.

The branch of statistics concerned with using sample data to make an inference about a population of data is called Inferential Statistics.

Basic and collective needs of the people - health, education, sanitation, water, food, housing facilities.

Economic Growth	Economic Development
Deals with the problems of develop ed countries	Deals with the problems of UDCs (Under Developed Countries)
Change is gradual and stead	Change is discontinuous and s spontaneous
Means more output	Means not only more output but also its composition.
Concerns Quantitative aspects i.e. increase in per capita income	Quantitative as well as Qualitative
Narrow Concept	Wider Concept Development = Growth + Change.

Global warming is the current increase in temperature of the earth's surface (both land and water) and its atmosphere.

China, USA, India, Russia, Japan.

When the responsibilities of the state increase, it supplements traditional revenue sources by borrowing from individuals and institutions within and outside the country. This is public debt.

(i) It involves fresh evaluation of expenditure in the Government budget assuming it as a new item.
(ii) A review is made to justify the project based on the socio-economic objectives and priorities of the society.
(iii) Government of India presented Zero Base Budgeting in 1987-88.

(i) The income of the government through all sources is public revenue.
(ii) Public revenue deals with the methods of raising public revenue such as tax and non-tax, the principles of taxation, rates of taxation, impact, incidence and shifting of taxes and their effects.

The SAARC Secretariat was established in Kathmandu (Nepal) on 16^th January 1987.

(i) To accelerate the economic growth, social progress and cultural development in the region.
(ii) To promote regional peace and stability and adherence to the principles of the UN Charter.

The rate at which one currency is exchanged for another currency.

(i) Availability of variety of goods for consumption.
(ii) Generation of more employment.
(iii) Industrialization of backward nations.
(iv) Division of labour and specialisation.

(i) It aims to control and regulate the purposes for which credit is granted by commercial banks.
(ii) It is of 2 types: variable portfolio ceiling and variable capital asset ratio

(i) SLR is the amount which a bank has to keep with itself in the form of cash, gold or approved securities.
(ii) CRR is the proportion of deposits which the bank has to keep with RBI in the form of cash.

A Commercial bank is a financial institution that accepts deposits and advances loans and are profit motivated.

Stagflation is a combination of stagnant economic growth, high unemployment and high inflation.

(i) Surplus goods were exchanged for money which in turn was exchanged for other needed goods.
(ii) Goods like furs, skins, salt, rice, wheat, utensils, weapons were used as money

Muliplier is the ratio of the change in national income to change in Investment.
K = \(\frac{ΔY}{ΔI}\)

It is the proportion of disposable income which individuals spend on consumption.

(i) Effective demand is the money spent on consumption of goods and services and on investment.
(ii) Employment and output depends on the level of effective demand
(iii) When effective demand increases, employment will increase.
(iv) Effective demand is determined by aggregate supply and aggregate demand.

The major feature of rural unemployment is the existence of unemployment in the form of disguised unemployment and seasonal unemployment.

It is the total income received by the individuals of a country before payment of direct tax.
Personal Income = National Income
- (Social Security Contribution and undistributed corporate profits)
+ Transfer payments

\(\mathrm{GNP}=\mathrm{C}+\mathrm{I}+\mathrm{G}+(\mathrm{X}-\mathrm{M})+(\mathrm{R}-\mathrm{P})\) or \(\mathrm{GNP}_{\mathrm{MP}}=\mathrm{GDP}_{\mathrm{MP}}\) + Net Factor income from Abroad.

(i) Circular flow of income is a model of an economy showing connections between different sectors of an economy.
(ii) It shows flows of income, goods and services and factors of production between economic agents such as firms, households, government and nations.

Economies can be classified into different types based on the Status of Development are
1. Developed
2. Underdeveloped
3. Undeveloped and
4. Developing economies