Class 12 Macro Economics - Chapter Introduction to Macro Economics NCERT Solutions | Describe the four major sectors in an ec
Describe the four major sectors in an economy according to the macroeconomic point of view.
The four major sectors of an economy according to the macroeconomic point of view are:
1. Households
2. Firms
3. Government
4. External Sector
Below are the one by one explanations.
1. Households
Households buy goods and services for consumption and also supply factors of production like land, labour, capital, and entrepreneur. Households provide the market for the output of the firms.
2. Firms
Firms are economic units that carry out the production. They employ and organise factors of production and undertake the production process for the motive of profit making.
3. Government
A state/government provides law and order, maintains growth and stability and provides administrative services. The main motive of a government is to undertake developmental projects such as dams, roads, heavy industries that usually have long gestation periods. The government invests in education, health sector and provides these services at nominal price. The motive of a government is to serve and not to make profits.
4. External Sector
This sector is engaged in export and import (external trade) of goods and services. If domestically produced goods and services are sold to the rest of the world, then it is called export. If the goods and services are purchased from the rest of the world, then it is called import.
More Questions From Class 12 Macro Economics - Chapter Introduction to Macro Economics
Popular Questions of Class 12 Macro Economics
- Q:-
What is marginal propensity to consume? How is it related to marginal propensity to save?
- Q:-
Explain why public goods must be provided by the government.
- Q:-
Differentiate between balance of trade and current account balance.
- Q:-
What are the four factors of production and what are the remunerations to each of these called?
- Q:-
What is a barter system? What are its drawbacks?
- Q:-
What is the difference between ex ante investment and ex post investment?
- Q:-
Distinguish between revenue expenditure and capital expenditure.
- Q:-
What are official reserve transactions? Explain their importance in the balance of payments.
- Q:-
Why should the aggregate final expenditure of an economy be equal to the aggregate factor payments? Explain.
- Q:-
What are the main functions of money? How does money overcome the shortcomings of a barter system?
Recently Viewed Questions of Class 12 Macro Economics
- Q:-
In the above question, calculate the effect on output of a 10 per cent increase in transfers, and a 10 per cent increase in lump-sum taxes. Compare the effects of the two.
- Q:-
Suppose C = 100 + 0.75Y D, I = 500, G = 750, taxes are 20 per cent of income, X = 150, M = 100 + 0.2Y . Calculate equilibrium income, the budget deficit or surplus and the trade deficit or surplus.
- Q:-
We suppose that C = 70 + 0.70Y D, I = 90, G = 100, T = 0.10Y (a) Find the equilibrium income. (b) What are tax revenues at equilibrium income? Does the government have a balanced budget?
- Q:-
Does public debt impose a burden? Explain.
- Q:-
Net National Product at Factor Cost of a particular country in a year is Rs 1,900 crores. There are no interest payments made by the households to the firms/government, or by the firms/government to the households. The Personal Disposable Income of the households is Rs 1,200 crores. The personal income taxes paid by them is Rs 600 crores and the value of retained earnings of the firms and government is valued at Rs 200 crores. What is the value of transfer payments made by the government and firms to the households?
- Q:-
Are fiscal deficits inflationary?
- Q:-
Consider an economy described by the following functions: C = 20 + 0.80Y, I = 30, G = 50, TR = 100 (a) Find the equilibrium level of income and the autonomous expenditure multiplier in the model. (b) If government expenditure increases by 30, what is the impact on equilibrium income? (c) If a lump-sum tax of 30 is added to pay for the increase in government purchases, how will equilibrium income change?
- Q:-
Explain the relation between government deficit and government debt.
- Q:-
Differentiate between devaluation and depreciation.
- Q:-
What are official reserve transactions? Explain their importance in the balance of payments.
- All Chapters Of Class 12 Macro Economics
- All Subjects Of Class 12