Government Budget class 12 Quiz

Microeconomics

• Analyzes the behavior and decision-making processes of individual economic units, such as households, firms, and markets.
• Examines the interactions among these units to understand the allocation of resources and the prices of goods and services.

Macroeconomics

• Focuses on the economy as a whole, studying aggregated economic variables such as GDP, inflation, and unemployment rates.
• Examines the overall performance of the economy, including issues related to economic growth, business cycles, and stabilization policies.

Positive Economics vs Normative Economics

• Positive economics deals with facts and objective analysis of economic phenomena, aiming to describe and predict economic outcomes.
• Normative economics, on the other hand, focuses on value judgments, policy recommendations, and prescriptions for achieving desired economic outcomes.

Behavioural Economics

• Examines how psychological, social, and emotional factors influence economic decisions, often deviating from traditional assumptions of rational choice.
• Studies how cognitive biases, heuristics, and other factors affect human decision-making in economic contexts.

Key Elements of Macroeconomics

• Gross Domestic Product (GDP): the total value of goods and services produced within a country's borders.
• Inflation: a sustained increase in the general price level of goods and services in an economy.
• Unemployment rate: the percentage of the labor force that is currently unemployed and actively seeking employment.