Answer the following questions in about a paragraph:
1. State the importance of Macro Economics.
* It’s provides ample opportunities to use scientific investigation to understand the reality .
* It helps to make meaningful comparison and analysis of economic indicators.
* It helps for better prediction about future and to formulate suitable policies to avoideconomic crises.
2. Describe the different types of economic systems.
*Capitalist Economy – Total freedom and private ownership o means of production.
* Socialist Economy – Public ownership of means of production.
* Mixed economy – Co-existence of capitalism and Socialism
3. Outline the major merits of capitalism. Automatic Working:
*Withoutany government intervention, the economy works automatically.
* Efficient Use of Resources:
All resources are put into optimum use.
* Economic Progress:
Production and productivity levels are very high in capitalistic economies.
4.What is the solution to the problem of double counting in the estimation of national income?
*To avoid double counting either the value of the final output should be takeninto the estimate of GNP or the sum of values added should be taken.
* Double counting is to be avoided under the valued added method.
*Any commodity which is either raw material or intermediate goods for the final productionshould not be included.
5. Write briefly about national income and welfare.
* National income is considered as an indicator of the economic wellbeing of a country
* The economic progress of countries is measured in terms of their GDP per capita andtheir annual growth rate.
* A country with a higher per capita income is supposed to enjoy greater economic welfarewith a higher standard of living.
6. List out the uses of national income.
* To know the relative importance of the various sectors of the economy and their contributiontowards national income.
* To formulate he national policies such as monetary policy, fiscal policy and other .policy
*To formulate planning and evaluate plan progress.
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