Introduction
Class 12 Economics · Introductory Macroeconomics · Chapter 1
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Economics
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Physics, Chemistry, Maths + English
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Economics
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Economics
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Physics
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History
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Mathematics
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Urdu Elective
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Geography
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Accountancy
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English Core
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Chemistry
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Business Studies
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Hindi Core
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Mathematics
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हिंदी (आधार)
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Accountancy
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اردو (اختیاری)
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Mathematics
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हिंदी (आधार)
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संस्कृतम् (केन्द्रिकम्)
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Physics
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हिंदी (ऐच्छिक)
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संस्कृत (ऐच्छिक)
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Physics
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हिंदी (ऐच्छिक)
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اردو (کور)
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Chemistry
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Urdu Elective
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Computer Science
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Chemistry
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Fine Art · Painting
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हिंदुस्तानी संगीत (गायन / वादन)
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Biology
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Informatics Practices
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Accountancy
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Biotechnology
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Accountancy
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सृजनात्मक लेखन और अनुवाद
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Business Studies
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हिंदुस्तानी संगीत (तबला / पखावज)
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Business Studies
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History
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History
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History
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Geography
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Geography
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Geography
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English Elective · Kaleidoscope
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Political Science
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Political Science
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Sociology
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Sociology
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Psychology
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English Core · Flamingo
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English Core · Vistas
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Home Science
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Home Science
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Summary
Macroeconomics studies the economy as a whole, focusing on aggregates such as total output, the general price level, employment and growth rather than individual markets. It treats the many goods of an economy as a single representative good whose price and output reflect the economy’s averages, because aggregate variables tend to move together. The subject emerged as a separate branch after John Maynard Keynes published The General Theory of Employment, Interest and Money in 1936, prompted by the Great Depression of 1929 when output and employment in Europe and North America collapsed and classical economists could not explain prolonged unemployment. The book studies the working of a capitalist economy, where production is carried out by private firms using factors of production — land, labour, capital and entrepreneurship — which earn rent, wages, interest and profit, and where output is produced for sale in the market using wage labour. Macroeconomics views the economy as four interacting sectors: households (who consume, save and supply labour), firms (who produce), the government (the State, which taxes, spends and frames laws), and the external sector (which trades through exports and imports and capital flows). Macroeconomic decision-makers such as the government and the Reserve Bank of India pursue public goals like full employment and price stability rather than private profit.
Key terms
Macroeconomics
The study of the economy as a whole using aggregates like total output and the general price level.
Great Depression
The severe worldwide economic downturn beginning in 1929 that inspired Keynesian macroeconomics.
Capitalist economy
An economy with private ownership of means of production, output produced for the market, and wage labour.
Factors of production
Land, labour, capital and entrepreneurship, earning rent, wages, interest and profit respectively.
Four sectors
Households, firms, government and the external sector, whose interactions macroeconomics studies.
External sector
The part of the economy dealing with trade and capital flows with the rest of the world.
Extra questions & answers
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Macroeconomics studies: