Adam Smith: Father of Economics
Economy can be defined as the combination of the production and expenditure of goods and the transfer of wealth to produce and get hold of those goods. Economics give details how people interrelate inside markets to get what they wish for otherwise achieve certain goals.
Macroeconomics: Deals with the actions of individuals and industries
- Traditional Economy
- Market Economy
Microeconomics: Analyzing the economic activity of an entire country or the international marketplace
- Command Economy
- Mixed Economy
A study of economics can explain all features of a country’s economy, for example how a country uses its resources, how much time laborers dedicate to work and free time, the result of investing in industries or else fiscal products, the consequence of taxes on a population, and why businesses accomplish something otherwise fail.
There are so many factors of economy on which country economy is depend but we can describe it in two types Demand side factors and Supply side factors
Demand Side
Growth of Aggregate Demand (AD)
AD= C+I+G+X-M (C= Consumption, I=Investment, Government spending or exports)
Factors of Aggregate Demand
- Interest Rates
- Consumer Confidence
- Real Wages
- Banking Sector
- Value of Exchange Rate
- Asset Prices
Supply Side Factors
- Levels of infrastructure
- Development of Technology
- Human Capital
Few other factors that affect Growth of Economy
- Commodity Prices
- Political Instability
- Weather
