What is inflation??

What is inflation??

Inflation refers to the increase in the general price level of an economy over a period of time.A rise in the price level not only of a product but also of aggregate products.The purchasing power of people decreases for inflation.Inflation increases the price of goods and services and reduces the value of money 

For Example:

Today we can buy a product at the price,after inflation it will not be possible to buy that product at that price.Beacuase inflation increase the price of the product and reduces the purchasing power of people.The value of money decreases. As a result,a product has to be bought at a higher price.
 

Difference Between Durable And Non Durable Goods??

Difference Between Durable And Non Durable Goods??

Those goods which can be consumed for a long period of time are called durable goods and those goods which can not be consumed for a long period of time are called non durable goods.Durable goods can be consumed long period and non durable goods can be consumed short period.

Books ,pens , furniture, refrigerators are all durable goods.Beacause these can be controlled for a long period after purchase and foods are non durable goods because food items must be eaten soon . otherwise it's will spoil.

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What is durable goods??

 What is durable goods??

The goods which do not spoil easily and can be consumed over a long period of time are called durable goods.

For Example 

Houses,cars, books are the durable goods because we can consume it's over a long period of time.

What is Macroeconomics?

         What is Macroeconomics?

Macroeconomics deals with the whole economy and describes various economic components like GDP, inflation ,unemployment, economic growth , recession and boom period of economy etc.

Macroeconomics is all about how the economy works for the development of a country and how they make decisions in different situations  . During this period , how to control inflation and how to control unemployment and economic growth are also discussed.

What is profit??

 

                                         What is profit?

The profit shows the difference between total revenue and total cost of a production. Total revenue refers to how much earned from a production and total cost refers to the total amount of money spent on a production . Total cost includes variable costs and fixed costs .

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Mathematically we can expressed ,

                                                       Profit =TR -TC

Here, TR=Total revenue And TC=Total cost

What is Consumer and producer??

 

Consumers are also called buyers and households. That is, consumers refer to those who buy various goods and services from sellers or producers

The producer is also called the buyer or the firm. Thus, producers (individuals, firms or vendors) refer to those who produce goods and services and provide these services to consumers.

Externality and Types of Externality

Externality: When someone produces and uses goods and services and third parties are affected by this production and use, it is called externality A third party can be affected both positively and negatively by external means. He can be benefited and harmed by externalities. 

 There are two types of externalities

 Positive externality   Positive externality means that when a person produces and consumes a product, the third party will be positively affected by that product. he will get extra benefits for that goods and services

           For Example 

 1. There are none of us who don't love flowers. Flowers and fragrances of flowers give us mental peace. If someone plants a flower garden in front of his own house and he benefits from the fragrance and flowers of those flowers and if the person in the next house also gets peace by seeing or smelling them, then it is called positive externality. 

 2. Also we can say as an example, if someone spends his own money and installs a lamp post in front of his house, then he is benefited by that lamp post and the pedestrians passing by the road are also benefited. Then we can call it positive externality. 

3. We can also say that if someone installs a tube well at home for his own needs and allows everyone else to take water from it besides his own consumption, then it is called a positive externality.

Negative Externality   Negative externality means that if someone produces and consumes goods and services and a third parties is harmed during the consumption and production of goods and services then it is called negative externality. 

 1. smoking is harmful to health. If someone smokes it will harm his health and also harm the person who is smoking next to him. So we can say smoking is a negative externality. Because his smoking is harming the person around him....

   2. Also, for example, if you put your garbage in front of your house, the smell of garbage will disturb people's normal life.It is called negative externality. 

3.  Also if you play music very loud in your house all day and night then people around you may have problem and if you play music and people around you have problem then that is negative externality.