IKHLAQ SIR.

balance of payments (BOP), Set of accounts that record a country's international transactions, and which (because double entry bookkeeping is used) always balance out with no surplus or deficit shown on the overall basis. A surplus or deficit, however, can be shown in any of its three component accounts: (1) Current account, covers export and import of goods and services,  (2) Capital account, covers investment inflows and outflows,  (3) Gold account, covers gold inflows and outflows. BOP accounting serves to highlight a country's competitive strengths and weaknesses, and helps in achieving balanced economic-growth.

Hey dear friends; There are so many nice places on the earth.  They are scattered across the country. Every place has its own distinct features. Some places have scenic beauty in abundance while many are famous for their architectural wonders. In addition every person has different tastes, choices and likings.  Several people enjoy the sight of scenic beauty; some are attracted towards places of historical and archaeological interests. A few may be interested in visiting places of religious importance. I have visited so many places of historical and tourist interest . But the visit which has a lasting impression on my mind is the visit of Kashmir. It is the most beautiful place I have ever seen. It is said to be the heaven on earth. It has the accolade of being “The Switzerland of India”.{kashmir }  I was wonderstruck to see the ravishing beauty of Kashmir. With snow-clad mountains, tall-trees of Chinar, lush green plains and valleys, Kashmir is one of the m...

Definition:  Monopolistic competition is a market structure which combines elements of monopoly and competitive markets. Essentially a monopolistic competitive market is one with freedom of entry and exit, but firms can differentiate their products. Therefore, they have an inelastic demand curve and so they can set prices. However, because there is freedom of entry, supernormal profits will encourage more firms to enter the market leading to normal profits in the long term. A monopolistic competitive industry has the following features: Many firms. Freedom of entry and exit. Firms produce differentiated products. Firms have price inelastic demand; they are price makers because the good is highly differentiated Firms make normal profits in the long run but could make supernormal profits in the short term Firms are allocatively and productively inefficient. Diagram monopolistic competition short run In the short run, the diagram for monopolistic competition is the sa...

A  monopoly  is an industry in which there is one seller. Because it is the only seller, the monopolist faces a downward-sloping demand curve, the industry demand curve. The downward-sloping demand curve means that if the monopolist wants to sell more, it must lower its price. (We are assuming that price discrimination is not possible; that the firm can charge only one price.) Because the monopolist must lower price to sell more, the extra or marginal revenue it gets from selling another unit is less than the price it charges. Thus, its marginal revenue curve lies below its demand curve. In contrast, for a seller who is a price taker, demand is identical with marginal revenue. The table below illustrates the case of monopoly. Marginal cost is the value of the additional resources needed to produce another unit of output. The marginal benefit to consumers is the price that consumers are willing to pay for each unit. You should recognize this column as a demand curve. The ma...

Law of Supply Definition:  The  Law of Supply  posits that there is a positive relationship between the supply of a commodity and its price, such that the supply of the commodity increases with the increase in its price and decreases with the fall in its price, other things remaining constant. Here,  “other things”  are the factors that influence the supply of the commodity such as technology, input prices, price of related products, nature and size of the industry, government policy, etc. The law of supply is based on the notion, that as the price of a product increases the suppliers with an objective to maximize their profits increases the production of a commodity for sale. The concept of the law of supply can further be illustrated by  Supply Schedule and Supply Curve . Supply Schedule:  The supply schedule is the tabular representation of the different prices of the commodity and the corresponding quantities that the suppliers are willin...

Definition:  Demand is an economic term that refers to the amount of products or services that consumers wish to purchase at any given price level. The mere desire of a consumer for a product is not demand. Demand includes the purchasing power of the consumer to acquire a given product at a given period. In other words, it’s the amount of products or services that consumers are willing and able to purchase. What Does Demand Mean? The factors of demand for given products or services is related to: The price of the good or service The income level The prices of complementary products The prices of substitute products Consumer preferences Consumption patterns What is the definition of demand?  It is also related to the quantity supplied, which is expected to meet demand so that demand and supply are in  equilibrium . Consumers seek utility maximization, which is the satisfaction they derive from using a given product or service for a given period while payi...

Markets  are places where goods and services can be exchanged between buyers and sellers. Each market has a demand and supply curve; the quantity of the good they are willing and able to purchase or sell at varying price points. The graph below is an example of typical supply and demand curves. The demand curve is generally downward sloping, showing more of the good will be demanded as the price of that good decreases. The supply curve is upward sloping. As the price increases, sellers are willing and able to sell more of the good. The point at which the two curves intersect is called the  market equilibrium .

Macroeconomics  is the study of economics involving phenomena that affects an entire economy, including inflation, unemployment, price levels, economic growth, economic decline and the relationship between all of these. While microeconomics looks at how households and businesses make decisions and behave in the marketplace, macroeconomics looks at the big picture - it analyzes the entire economy. Importance of Macroeconomics We live in a complex and interconnected world. No one is unaffected by the economy. Most of us depend on the economy to provide job or business opportunities so we can make money to buy the goods and services we need to survive and function in modern society. The study of macroeconomics allows us to better understand what makes our economy grow and what makes it contract. A growing economy provides opportunities for better lives, while a contracting economy can be disastrous for most everyone. Macroeconomics provides the analysis for proper policy making ...

Microeconomics  is a branch of economics that studies the behavior of individuals and businesses and how decisions are made based on the allocation of limited resources. Simply put, it is the study of how we make decisions because we know we don't have all the money and time in the world to purchase and do everything. Microeconomics examines how these decisions and behaviors affect the supply and demand for goods and services, which determine the prices we pay. These prices, in turn, determine the quantity of goods supplied by businesses and the quantity of goods demanded by consumers.. Microeconomics should not be confused with  macroeconomics , which is the study of economy-wide things such as growth, inflation and unemployment. Common Topics in Microeconomics Microeconomics is a high level branch of economics that has many different components. Let's take a closer look at common topics found in microeconomics. Supply and Demand Supply and demand  are the mo...

Meaning , Economics is that branch of social science which is concerned with the study of how individuals, households, firms, industries and government take decision relating to the allocation of limited resources to productive uses, so as to derive maximum gain or satisfaction. Simply put, it is all about the choices we make concerning the use of scarce resources that have alternative uses, with the aim of satisfying our most pressing infinite wants and distribute it among ourselves. Nature of Economics, Economics is a science: Science is an organised branch of knowledge, that analyses cause and effect relationship between economic agents.  {1 } Economics helps in integrating various sciences such as mathematics, statistics, etc. to identify the relationship between price, demand, supply and other economic factors. {2 }Positive Economics: A positive science is one that studies the relationship between two variables but does not give any value judgment, i.e. it states ‘w...

It’s the study of scarcity, the study of how people use resources and respond to incentives, or the study of decision-making. It often involves topics like wealth and finance, but it’s not all about money. Economics is a broad discipline that helps us understand historical trends, interpret today’s headlines, and make predictions about the coming years.                               OR  The branch of knowledge concerned with the production,consumpation and transfer of wealth.